Retail gasoline and diesel prices in the US are at their highest seasonal levels ever, a pain point for consumers looking ahead to summer travel.
While fuel costs have eased slightly in recent days as oil markets weigh the possibility of a US-Iran deal to end the war, retail prices are still elevated — especially for this time of year. Gasoline averaged $4.12 a gallon on Monday, according to the American Automobile Association.
That’s a record for the date and compares with the previous high of $4.07 on the same day in 2022, following the price spike driven by Russia’s invasion of Ukraine.
Meanwhile, national average diesel prices sat at $5.65 a gallon, more than 60 cents above their previous high-water mark for this time, set in 2022.
The war in Iran has effectively choked off traffic through the Strait of Hormuz, a vital waterway through which nearly a quarter of the world’s seaborne oil travels. That’s sent crude oil prices higher and fueled the biggest jump in US inflation in nearly four years. The surge in gasoline prices and diesel costs are rippling through to airfares as well as food and transportation costs.
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The price of gasoline has risen more than $1.10 per gallon since the US and Israel launched attacks on Iran at the end of February.
Prices of both fuels are expected to remain elevated. Gasoline prices could be higher for “a few more weeks,” US Energy Secretary Chris Wright said on Fox News on Tuesday.
That echoed a forecast from the US Energy Information Administration from last week, which projected retail gasoline prices will average $4.16 a gallon in the second quarter if the conflict ends in April, before easing to average $3.55 by the fourth quarter.
